Blignaut Boerdery | Sardiniapls , Bultfontein, Bultfontein, 9670

The contract allows wool growers with a mechanism to limit the risks associated specifically with the price of woo There are also many other role players subjected to price risk in the wool industry including buyers and processors who can also benefit from the contract In addition to the key groups of participants the contract is open to speculators who bring in much needed liquidity into the market This enables market participants an opportunity to trade in and out of the market effectively This contract gives an opportunity to hedgers and speculators to participate as well as allowing people not necessarily involved in the wool industry an opportunity to acquire insight into how well wool is performing The difference between hedging and speculating can easily be identified The participant who hedges is able to link back their futures position to their exposure of the underlying physical wool a wool grower that produces 500 kg and has 5 futures contracts is hedging 500 kg of his her wool Hedging replaces an